Woongjin Energy

Woongjin Energy

The World’s Best Quality Ingot and Wafer

Investor

Relations

Investor Relations - July 2012 -

Forward Looking Statement

This material contains the company’s current expectations regarding future

business and financial performances, and forward-looking statements

concerning the company’s management strategy, R&D

activity, capex, and business plans.

Forward-looking statements are subject to risks and uncertainties that could

cause actual results and outcomes to differ materially from expectations.

The company does not guarantee the accuracy or completeness of any

statements that do not relate strictly to historical or current facts.

I. Company Overview

II. Global Solar Market

III. Investment Highlights of Woongjin Energy

1. Secure and stable supply

2. Leading Technology of Diamond Wire Saw

3. Strong Support by Woongjin Holdings

4. Diversifying Revenue Mix

5. Expand Manufacturing Capacity

6. Cost Reduction & Higher Efficiency

IV. Financial Performance

V. Appendix

Table of Contents

I. Company Overview

Creating bright future

with solar energy

General Status

Ownership Structure

Foundation November, 2006

Chairman & CEO Ph.D Oh, Myung & Ph.D Lee, Jae-Kyun

Location 1316 GwanPyung-Dong YuSeong-Gu, Daejeon

Business Ingot & wafer for Solar

Employees 700 people(as of June 30th, 2012)

Affiliates Woongjin Holdings and 30 subsidiaries

Website www.WoongjinEnergy.com

Company Overview

Stock Information

Total issued shares 66,728,721

Paid-in capital KRW 33.3 Billion

Listing date June 30, 2010

Market cap. KRW 872.4 Billion

- 52wk High : 14,050 KRW

- 52wk Low : 4,045 KRW

- As of Jun. 29th, 2012: 5,380 KRW

• Pursue a high quality & productivity in PV industry and make an effort quality improvement to be a

Global No.1 company

[As of June 22th, 2012]

Woongjin Holdings and

Related Parties

Domestic Institutions

& Others

Foreign investors

* As of Jun. 29th, 2012

35.6%

4.1%

60.3%

http://www.woongjinenergy.com/

Company History

Company History

• Make a bright future by developing and supplying renewable energy

Established Woongjin Energy

Joint venture agreement between

Woongjin Group and SunPower

Acquired certification for electric work Registered as an official member of the new and renewable company

Completion of 1st facility

Acquired ISO, OHSAS certification

Acquired permission of the PV plant construction Received $30 million Export Tower

Completed 200Kw In-house PV system

Listed in KOSPI

Green Certification(Techology&Company)

LEED certification for green buildings

Completion of fab2

350MW Ingot Growing Capa extended

Conclusion of “voluntary agreement for save energy

and decrease greenhouse gas’ Received KRW 100 billion Sales Tower Award

Received $100 million Export Tower Award

Mechanical Completion of Fab2

break ground for fab3

Full year ingot/wafer shipment

of 650~750 MW in 2012(e)

1~1.2GW ingot manufacturing

capacity in Q4-2012(e)

500MW~1GW wafer manufacturing

capacity in Q4-2012(e)

New KOSPI 200 Members

In-House wafer Manufacturing

Main Product

Solar

Cell / Panel

Poly

Silicon Ingot / Wafer

Installation

<Power Generation>

WJ Polysilicon WJ Energy SunPower / AUO SP SunPower

5,000 MT/yr. 1GW (Ingot)

500MW (Wafer) > 1GW/yr.(E) >4GW/yr.(E)

17,000MT/yr. by 2013

2GW (Ingot) 1.5GW (Wafer)

by 2013

> 2GW/yr.

by 2014(E) >6GW/yr.(E)

Hemlock,Wacker, OCI,GCL,REC, Tokuyama

LDK,GCL,Renesola, Solargiga,Yingli,REC,

MEMC,Trina

Suntech,JA Solar,Q-Cell,

Motech,Yingli,Jinko,Sharp

Canadian Solar,LDK

Company

Capacity

(2011)

Expansion

Competitors

• Vertically integrated value chain with strong partnerships, Woongjin Polysilicon and Sunpower

• Specialized in high quality monocrystalline ingot and wafer production

• Global No.1 in the field of single Crystalline Solar silicon in 2011

WJE Main Products

Capacity & Shipment

WJE Capacity & shipment Strategic Hints

Ingot & Wafer Capacity

- Product portfolio reforms due to growing

needs for high efficiency solar module. (Ingot ->

Wafer)

- ‘12 CAPEX - 15~20 Billion won for

maintenance & upgrades of facilities. (If Wafer

Capacity is expanded, additional 80~90 billion

won could be revised)

Ingot & Wafer Shipment

- 1Q ’12 shipments down -1.1% QoQ and up

1.8% YoY

- ‘Shipment in FY2012 estimates about 650 ~

750 MW (excluding Ingot/Wafer capa up)

(Unit: MW)

350 380

1,000

1,000 ~

1,200

500

500 ~

1,000

0

200

400

600

800

1000

1200

1400

2009 2010 2011 2012(E)

Ingot Capacity Wafer Capacity

Ingot

Shipment

Wafer

Shipment

314

462 450

106

300

• Business portfolio has been diversified due to expansion of Wafer field as well as maintain the Ingot capacity

• Depends on the Woongjin Group’s support, the size of capacity expansion will be decided

221

II. Global Solar Market


with solar energy

Germany _2012(E) market cap

5.0 GW

- The issue of FIT cut down is

delayed.

- Constant demand a policy to

protect inbound market by PV

players

China _2012(E) Market cap 4.0 GW

- Boom up Solar Project due to FIT on Aug 2011

-Barrier to enter the domestic market by

oversea players due to low FIT policy

- Priority to have relationship with Gov.

- Cooperation with China PV players is essential

prerequisite

Canada _2012(E) Market cap 0.7 GW

- Local Contents : Specify the

domestic ratio when building a PV

power station

Japn_2012(E) Market cap 2.2 GW

- Introduction FIT on Jul 2012

(￥42/Kwh)

- Strong citizen’s backlash to

operate the nuclear power plant

- Mega Solar Project led by private

enterprises

U.S.A_2012(E) Market cap 3.2 GW

- Demand expansion is estimated due

to Solar Lease business

-Anti-Dumping tariffs on Chinese PV

players that may increase PV prices

- Constant growth expected due to

20% supply of RPS policy and 30%

tax deduction of Renewable Energy

Development Project

• Global PV Market is expected to rise up due to new emerging market(USA, Japan etc) boom, even though

Europe market demand decrease

1. Emerging Market Growth

Italy_2012(E) Market cap 5.0 GW

-The policy of FIT cut down is delayed.

- Local Contents: paying additional

10% incentive (made by EU)

India_2012(E) Market cap 0.6 GW

- Plan to install 22GW by 2022

- Local Content: Enforcement the

policy to use domestic module

Global Demand for PV Module

[unit : GW]

2. Fast Growing Industry

[Source: Photon Consulting, WJE Analysis]

Comments

• Photon : 20.0% CAGR expected from 2012 to

2015, 44.8GW installations by 2015

• Key drivers include:

Retail grid parity

Increasing demand for electricity in

developing countries

Energy security

Environment concerns

Need for distributed energy

Move away from nuclear

energy in Japan and Germany

6.9 8.4

19.2

26.8 25.9

29.2

36.4

44.8

2008 2009 2010 2011 2012 2013 2014 2015

Company View:

Around 24.2GW in 2012

24.2

• Demand for modules grew at 63.9% annual rate in the past 3-yrs to an estimated 26.8GW in 2011 and

is expected to reach 40-45GW by 2015

3. Increasing High Efficiency Products Needs

Source: Photon Consulting

Structure of Average System Cost

[Unit: $/W]

BOS(Balance of System): Equipment to operate a system reliably

(Inverter, Control Unit, Electric wires, etc)

47% 44% 38% 30%

53% 56% 62% 70%

$4.90

$4.25 $3.70

$3.15

$-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

0%

20%

40%

60%

80%

100%

120%

2009 2010 2011 2012

Module BOS System ASP

Mono Cell & Multi Cell price trend($/Wp)

Source: PV Insights, PHOTON and WJE Analysis

• Market needs for High Efficiency Wafer is being increased because BOS cost is getting big potion in a total

system cost.

• The price gap between Mono and Multi is getting wide since 2nd half in 2011, and currently the wafer price

difference is 47 C/pcs.

• The price fall on PV products is positive effect for long-term market, and BOS price-down will be focused.

I. Company Overview


with solar energy

III. Investment Highlights


2. Leading Technology of Diamond Wire Saw




6. Cost Reduction & Higher Efficiency

Secure & Stable

Supply Expand Manufacturing

Capacity

Diversifying Revenue

Mix

WJ Group Strong

Support for PV industry

Core

Competency

Key Investment Highlights

Cost Reduction &

Higher Efficiency

Leading Technology of

Diamond Wire Sawing


Stable

product

supply

590 650 650 650 650

5

355

1000

1355 1400

2010 2011(E) 2012(E) 2013(E) 2014(E)

Fabs 1&2 fab 3

SunPower Capacity Expansion(E)

2,050 2,005

1,650

1,005

(Unit: MW)

• Woongjin Group and SunPower(US) signed a joint

venture to create a viable solar energy company for a

stable ingot supply to SunPower

• Trustworthy partnership in terms of quality, supply and

price

• Win-Win partnership and vertical integration, with

long-term contract(Until 2016)

Joint Venture & Captive Market

595

• Close and trustworthy partnership with SunPower

[[Source: SunPower Jun 7th,2011]

Fab 3 Fab 1&2

2. Diamond Wire Saw Brings High Efficiency

• Improving profitability as strengthening of competitive leadership at Wafer

SiC Slurry on

Bare Wire

Coolant on

Diamond Wire

• Develop non-slurry wire-saw process

• Increase productivity and secure cost

competitiveness

• Increasing the wafer productivity

• Increase productivity(capa 1.6X/unit)

• Lower Manufacturing cost

• Save Capex for Slurry recycle system(2 bil.

KRW)

• Save Capex for wire saw(72ea → 36ea)

• Easy Coolant Recycle(Eco-friendly process)

Effects Focus

WoongjinEnergy

(N-Type)

Industry

average-Mono

Industry

average-Multi

Source: Company data, CICC Research

22~23%

~18%

~15%

WJ Group Status Group Strategy

• Increase PV Biz value through continuous investment on WJ Energy & WJ Polysilicon

• Focus on PV Biz for future growth engine


“ Woongjin Group’s announcement that it would

unload its water purifier unit, Woongjin Coway,

sparked mixed reflection among investors and

analysts. ···

The chemical and energy affiliates got a boost on

the stock market thanks largely to Woongjin

Group’s plan to improve financial conditions for

its affiliates and focus more on the solar energy

business and investment. ···”

In The Korea Herald (2012-02-06)

Woongjin Group shows strong

will to focus on PV business

-

2,000

4,000

6,000

8,000

10,000

FY2007 FY2008 FY2009 FY2010 FY2011

3,230

4,501 4,740

5,373

6,153

4,120

5,831

6,557

7,772

8,814

Sales Asset

Sustainability

& Growth

Business


Strategy Quarterly Product Mix

• Strengthen the Wafer revenue as we produce high efficiency Ingot

• Not only focus on supply Ingot to Sunpower, various companies being dealt and require

high efficiency products

• Stable Ingot Capacity

• Increase Wafer sales due to high needs

for high efficiency products

• Diversifying sales channels

• Increase Wafer productivity to bring

COGS down 0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

Ingot Wafer Others


• Strengthen the company position and economic of scale due to the capacity increased

2.0GW+ of “Desired” Capacity

Capacity in 2012

Capacity by 2013~2014

Ingot Wafer

1.000 ~ 1,200

2,000(E)

500 ~1,000

2,000(E)

• Ingot/wafer capacity of ~2,000 MW* for 2013-14

- Depends on the Solar Market condition, the capa up will be decided

• Planning to step into system project in 2012

6. Cost Reduction & Premium ASP

• Maintaining Long-Term Leadership, Growth and Profitability

• Target all-in manufacturing cost at $0.55 ~ $0.60/Watt by end of Q312

•

Cost

Reduction

Higher

Efficiency

&

Productivity • N-Type Wafer

• Thinner Wafer

• Lager Ingot size

• Proprietary equipment

upgrades to increase capacity

• Improvement of product

yeild

• Developing the low cost

diamond wire

• Reduce Kerf loss

• Multi-pulling

• Less Quartz, electricity,

Argon

• Increase consumable and

polysilicon recycling

• Greater manufacturing and

purchasing economic of

scale

• Reduce Coolant loss

6

IV. Financial Performance


with solar energy

Revenue Gross Profit(Loss)

Operating Income(Loss) Net Income(Loss)

1. Key Performance Indicators

118.9 160.4

313.4

69.0 46.0

2009 2010 2011 4Q11 1Q12

(Unit: Billion KRW)

64.3 66.3

43.5

7.3

(18.9)

2009 2010 2011 4Q11 1Q12

54.1% 41.3% 13.9% 10.6% -41.1%

56.5 56

20.1

4.9

(19.8)

2,009 2,010 2,011 4Q11 1Q12

47.5% 34.9% 6.4% 7.1% -43.0%

41.0 47.5

21.5 11.2

(23.2)

2009 2010 2011 4Q11 1Q12

34.5% 29.6% 6.9% 16.2% -50.4%

Margin

2. Summary Balance Sheet

Item 4Q ‘11 1Q ‘12

Total Assets 741.3 660.9

Current Asset 329.9 260.0

Cash & Equivalent 107.3 81.5

Non-Current Asset 411.4 400.9

Total Liabilities 421.0 341.3

Current Liabilities 147.1 92.3

Short-term Debt* 86.3 39.1

Non-Current Liabilities 273.9 249.0

Long-term Debt** 270.7 245.4

Total Equities 320.3 319.6

Condensed Balance Sheet

(in KRW billions)

* including short-term loans

** including long-term loans, debentures

Key Financial Ratio

2012.1Q 2013 2014~ Total

39.1 19.8 225.6 284.5

□ Debt Maturity (in KRW billions)

106.8%

131.4%

70.0%

42.8%

117.8%

98.7%

35.3%

84.3%

72.3%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

140.0%

1Q 11 4Q 11 1Q 12

L/E Ratio D/E Ratio Net D/E Ratio

V. Appendix


with solar energy

Appendix : Summary Financial Statement

Condensed financial statements

(Unit : Million KRW)

Condensed Income Statement

Account 2009 2010 2011 1Q12

Current assets 94,429 175,394 329,994 259,994

Cash & Equivalent 85,439 70,337 107,301 81,548

Inventories 8,990 27,387 73,054 72,252

Other current assets - 77,670 149,639 106,194

Non-current assets 123,779 284,268 411,348 400,930

Tangible assets 122,221 265,193 370,626 359,637

Intangible assets 574 1,808 2,970 3,026

Other Non-current assets 984 17,267 37,752 38,267

Total assets 218,208 459,662 741,289 660,924

Current liabilities 42,612 97,006 147,059 92,301

Noncurrent liabilities 78,701 63,902 273,886 249,008

Total liabilities 121,313 160,907 420,945 341,309

Capital stock 23,060 31,000 31,047 33,338

Capital surplus 1,501 142,421 147,281 167,882

Capital adjustment 343 422 930 925

Comprehensive income (684) 4,998 (252) (353)

Retained earnings 72,675 119,913 141,339 117,822

Total

shareholders’ equity 96,895 298,754 320,344 319,615

Account 2009 2010 2011 1Q12

Revenue 118,893 160,347 313,376 46,036

COGS 54,554 94,013 269,865 64,928

Gross profit 64,339 66,334 43,511 (18,892)

SG&A 7,856 8,781 17,210 4,791

Other operating

Income - 5,925 20,814 5,679

Other operating

expenses - 7,438 27,059 1,790

Operating

profit 56,483 56,040 20,056 (19,794)

Financial

Income - 7,663 3,182 1,431

Financial

Expenses - 5,340 7,780 4,984

Pre-tax profit 50,476 58,362 15,459 (23,346)

Net profit 41,033 47,446 21,573 (23,205)

(Unit : Million KRW)

■Note

1. FY 2010, 2011, 1Q12 results based on K-IFRS

2. FY2009 results based on K-GAAP

■Note

1. FY2010,2011,1Q12 results based on K-IFRS

2. FY2009, results based on K-GAAP

Fab 1 & 2 Fab 3(E)

Location 1316 KwanPyung-Dong,

Yuseong-Gu. Daejeon

Area Building area : 13,992m2,

Total area : 36,527m2

Construction Fab 1 : Mar. 2007

Fab 2 : Nov. 2009

Completion September 2011(Fab 1 & 2)

Investment Fab 1 : 150 Bil. KRW Fab 2 : 270 Bil. KRW

Production

capacity

Fab 1 2,000MT/yr. Fab 2 4,000MT/yr.

Location 64-1 Tamnip-Dong,

Yuseong-Gu. Daejeon

Area Building area : 19,507m2,

Total area : 33,059.m2

Construction October 2011

Completion December 2013~2014*

Investment 514.4 Bil. KRW

Production

capacity 6,000MT/yr.

Appendix : Facility Status

* The date is yet undecided

27

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Thank You!

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Woongjin Energy